2013 (1) TMI 355 - AT - Central Excise

Tribunal upholds Commissioner's decision on duty abatement for manufacturer under levy scheme.

The Tribunal dismissed the appeal regarding abatement of duty under Rule 96ZP of Central Excise Rules, 1944 for the closure period. The case involved a ... Abatement for closure period - compliance with Rule 96ZP(2) - onus on assessee to intimate meter reading and closing stock - duty of excise officers to verify stock - adverse presumption against department for non production of verification reportsAbatement for closure period - compliance with Rule 96ZP(2) - onus on assessee to intimate meter reading and closing stock - duty of excise officers to verify stock - adverse presumption against department for non production of verification reports - Validity of the Commissioner's order allowing abatement for 135 days from 17-11-1997 despite the assessee not furnishing electricity meter reading and closing stock as per the intimation requirement - HELD THAT: - The Tribunal upheld the Commissioner's allowance of abatement. The Commissioner found that the rolling mill had no main electric connection and operated on a diesel generator, rendering non furnishing of an electricity meter reading immaterial. Although the assessee failed to intimate closing stock, departmental officers visited the premises on three occasions after receipt of the intimation and found the unit closed; however, the department did not place on record any verification reports showing the stock position. The Tribunal held that the statutory obligation on the assessee to furnish closing stock information does not absolve excise officers of the duty to verify stock when they inspect the unit, and the absence of any verification report or evidence from the department requires drawing an adverse presumption against the department. In those circumstances there was no infirmity in the Commissioner's exercise of discretion to allow abatement for the period beginning 17-11-1997.The Commissioner's order allowing abatement for 135 days from 17-11-1997 is sustained and the appeal is dismissed.Final Conclusion: The Tribunal dismissed the revenue's appeal and upheld the Commissioner's order granting abatement from 17-11-1997 for 135 days, relying on the material finding that meter reading was immaterial for a diesel operated mill and on the department's failure to produce verification of closing stock, warranting an adverse presumption against the department. Issues:1. Abatement of duty under Rule 96ZP of Central Excise Rules, 1944 for closure period.2. Compliance with notification requirements for closure of unit.3. Negligence of excise officials in verifying stock position during closure.Analysis:1. The case involved the respondent, a manufacturer of hot rolled products, operating under the compounded levy scheme. The dispute arose when the Commissioner determined the annual production capacity and allowed abatement for a closure period starting from 17-11-1997. The Board directed an appeal, contending non-declaration of closing stock and electricity meter reading in the intimation letter of closure on 5-11-1997. The department filed an appeal challenging the Commissioner's decision.2. The respondent did not represent during the hearing, leading to an ex parte decision as per Rule 20 of CESTAT (Procedures) Rules, 1982. The department argued that the respondent failed to comply with Rule 96ZP(2) by not providing electricity meter reading and closing stock details during the closure notification. The Commissioner's order was scrutinized, highlighting the absence of stock information but also the negligence of excise officials in verifying the stock position during visits post-closure.3. The Commissioner's order was analyzed, emphasizing the use of a diesel generator set for operations, making the meter reading less significant. The failure to disclose stock information was acknowledged, but the department's negligence in verifying stock during multiple visits was noted. The Tribunal found no fault in the Commissioner's decision to allow abatement, considering the lack of evidence on stock verification by excise officials. The appeal was dismissed based on the presumption of stock verification during the visits.This detailed analysis covers the issues of abatement of duty, compliance with closure notification requirements, and the negligence of excise officials in verifying the stock position, leading to the Tribunal's decision to dismiss the appeal.